terima kasih buat kalian semua..

Thursday, April 22, 2010

PLUS explains how profits are distributed

WE refer to the letter, “Toll operators enjoying good profits” (The Star, April 14).

The simplistic arguments put forth by the writer do not reflect the true picture as profit does not translate directly into cash generation. Firstly, the profit after tax of RM1.185bil includes non-cash element for toll compensation of RM0.6bil. Secondly, there are other cash flow items which are not accounted for in the income statement, which include payment of capital expenditure and repayment of loan principal.

Furthermore, the cash balance of RM2.85bil is inclusive of reserves for loan repayments amounting to RM1bil. This reserve is one of the requirements under the loan agreement and is restricted in use.

In the concession business, the repayment of loans is commonly matched against the long concession period. The cash balance must take into account the repayment of debt obligations in the future years. PEB Group’s total borrowings stood at RM11bil as at end 2009.

In addition, we are also required to adhere to financial covenants under the loan agreement in ensuring that the debt-servicing ability remains intact whilst preserving the high AAA bond rating for most of our borrowings.

It should be realised that about 35% of toll collections are ploughed back into activities and initiatives that benefit the highway users. In 2009 alone, RM443mil was spent on highway maintenance (inclusive of pavement structural overlays, slope rehabilitation, structural strengthening of bridges), RM137mil on expressway and facilities upgrading including the enhancement of rest and service areas and lay-bys and about RM20mil given out as toll discounts.

Despite the rising costs for both operating and capital expenditure due to the increase in cost of raw materials or as a general outcome of inflation, we will continue to spend significant amounts to improve our facilities and preserve our assets for the comfort and safety of our users.

We also wish to highlight that PLUS Expressways is a public listed company where 55% of our stake is held directly and indirectly by Khazanah and another 28% by Government-related investment institutions such as EPF, KWAP, LTAT and PNB/Amanah Saham of which the members are the general public.

Naturally, investors that also include foreign, retail and minority shareholders expect decent returns. It is therefore essential for a company to realise profitability for dividend distribution to its shareholders.

For 2009, PLUS paid RM800mil as dividends.

PLUS also wishes to highlight that the North-South Expressway (NSE) is an alternative mode of road travel providing users with the option to travel on a smooth and comfortable journey. Almost 99% of the NSE is served with toll-free federal roads running almost parallel to its alignment and these roads are constantly being upgraded by the Government. Motorists have the option to use the NSE and pay toll or use the federal roads which are free.

It has been and will continue to be our priority to ensure a safe, convenient and comfortable journey for our users at all times.